Staples Merger Unlikely After Federal Judge Blocks Similar Deal

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Staples Merger Unlikely After Federal Judge Blocks Similar Deal

 news 2015-06-25 at 1:38:05 pm Views: 189
  • #42857

    Staples Merger Unlikely After Federal Judge Blocks Similar Deal
    Staples Merger Unlikely After Judge Blocks Sysco/US Foods Union
    By Josh Kosman

    The proposed $6.3 billion merger of Staples and Office Depot became less likely Tuesday afternoon after a federal judge blocked food service distributor Sysco’s merger with US Foods, sources told The Post.

    The deals have similar characteristics and the judge upholding the Federal Trade Commission’s suit to block Sysco may give regulators confidence to also stop Staples.

    Judge Amit Mehta ruled to halt the $8.2 billion Sysco merger temporarily until a full trial is held. But US Foods already said it would not extend the merger agreement if it were halted — even temporarily.

    In February, the FTC — by a 3-2 margin — sued to stop the deal, claiming the merger of the only two national food service providers to restaurants, schools and hospitals would result in higher prices.

    Sysco argued unsuccessfully that customers could get many of its goods from other sources, and the food service industry was regional in nature.

    Staples, like Sysco in food service, is proposing combining the country’s two largest — and, arguably, only national — players. It is making a case about office supplies similar to what Sysco made about food products.

    Yet Staples has customers that buy its products on a national basis. And Staples is seen as offering lower prices than regional firms.

    The FTC is expected to rule on the Staples merger in the fourth quarter.